In December, the precious metals market is losing its traditional status as a safe haven asset. Silver broke through historic price levels one after another, soaring from $40 to $64.28 in just a few weeks. Behind this abnormal surge is not merely an improvement in supply and demand fundamentals but also the hidden structural fragility of the entire financial system. The optimistic view that silver will not run out and the reality are diverging, potentially leading to a market crisis.
Reasons for the continued rise in silver prices
On the surface, the rise in silver makes sense. Expectations of interest rate cuts by the Federal Reserve (FRB) drove the entire precious metals sector. Silver, being a highly volatile commodity, reacts more sensitively than gold, recording an almost 110% increase year-to-date. This is gold's